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“They [BLS staff] produce a product, that is then subject to the review, and approval and processing of political appointees in the department. That’s a fact-that’s exactly how it works before anything goes public.”
Here’s how the monthly unemployment numbers in the Department of Labor’s household survey are compiled. The Census Bureau surveys about 60,000 representative households, asking how many adults are working and unemployed. They hand the numbers off to career civil servants at the Bureau of Labor Statistics, who crunch them to get the unemployment rate, the number of people currently employed, and other statistics.
“Numbers can be manipulated,” says Paul Conway, who was chief of staff to Secretary of Labor Elaine Chao under President George W. Bush. Conway now runs a conservative advocacy group, Generation Opportunity, trying to galvanize the youth vote. “They [BLS staff] produce a product, that is then subject to the review, and approval and processing of political appointees in the department. That’s a fact—that’s exactly how it works before anything goes public.”
Conway says political appointees didn’t change the numbers when he was at the Department of Labor. But he says of today’s report: “I find it at best incredible, and at worst suspicious.”
The U.S. third quarter GDP data, due at 8.30 a.m. EDT, is expected to show that the world's biggest economy is expanding at a sluggish annual rate of 1.9 percent, according to a Reuters survey of economists.
The modest expansion is still seen as falling short of what is needed to make much of a dent in unemployment, and will offer little cheer for the White House a little more than a week before the November 6 presidential election.
Ahead of the GDP data, commodity markets were all sliding, reflecting the concern that any growth coming from the U.S. will struggle to offset the slowdown caused by Europe's debt crisis and its effects on Asia's giant export industries.
Originally posted by fltcui
I can't wait to see Rick Santelli's response on CNBC if these numbers are rigged again.
He'll go ballistic. Watch him at 830 Eastern time on CNBC on November 2.
But it’s worth remembering just how subject to error these early GDP estimates are. For example, the second quarter GDP numbers were revised down from an initial estimate of 1.7 percent to 1.3 percent. According to the BEA, the average revision in either direction is 0.5 points between the first and second estimate, 0.6 between the first and third, and 1.3 between the first and last. That’s a huge amount of error. Here’s how revisions have looked from 2008 to the first quarter of 2012:
Because this measure does not reflect well changes in the economy, I have developed an alternative to it. In my alternate calculation, I compare the current labor force to where we would expect it to be in a solid economic expansion: labor participation rate of 67%. The difference between these two is my measure of the undercount.
.67(243.772 million) = 163.327 million (where the labor force should be)
163.327 million — 155.063 million = 8.264 million (the real undercount)
This is a decline of 280,000 from the August figure of 8.544 million. This is the capture of the undercount that the BLS misses.
With this number we can now go back and calculate where the U-3 and U-6 really are, that is the real unemployment and real disemployment rates.
Real unemployment: 12.088 million (U-3 unemployment) + 8.264 million (undercount) = 20.352 million (down 736,000 from August)
Real unemployment rate: 20.352 million / 163.327 million = 12.5% (down from 12.9% in August)
Real disemployment: Real unemployment + involuntary part time workers = 20.352 million + 8.613 million = 28.965 million (down 154,000 from 29.119 million in August)
Real disemployment rate: 28.965 / 163.327 million = 17.7% (down from 17.8% in August)
The Curious Case of the Part Time Worker: The BLS Jobs Report Covering September 2012
He is expecting an increase of 140,000 jobs while the jobless rate to ticks up to 7.9 percent. "Layoffs remain very low, but so does hiring," Zandi said. "Businesses will remain cautious and won’t increase their hiring until policymakers address the fiscal cliff, the debt ceiling and long-term deficit reduction."
Hall outlined two scenarios for the jobs report: modest growth of about 120,000, similar to last month, combined with either a rise in the unemployment rate or a fall in labor force participation; or an increase in job growth, more than 150,000, with no change in the unemployment rate. He suggested that the first option is more likely because economic growth, which came in at 2 percent in preliminary estimates for the third quarter, doesn’t support a larger increase in job growth.
But Hall and other economists are concerned that economic growth is too low to produce more jobs and a decline in business investment, an early predictor of job growth, doesn't bode well for the final three months of the year.
"I find this a genuine concern since it is suggesting that job growth may decline in the fourth quarter," Hall said.
Josh Bivens, research and policy director a the Economic Policy Institute, called the 2 percent, "too slow to support solid job growth."
“It is our intention that Friday will be business as usual,” said Carl Fillichio, a senior press advisor at Labor. Mr. Fillichio’s statement provided clarity to an earlier Labor statement that said the agency would assess how to handle data releases this week after the “weather emergency” is over.
It is unclear, however, whether additional prep work needs to take place before the employment data is made public. The shutdown of the Washington region’s public transportation system and strong winds and heavy rain could make it difficult for workers to report to their offices.
Revisions to the way payroll data firm ADP counts private sector job creation have resulted in a sharp drop in the September employment count.
ADP's new calculations put the monthly job creation at just 88,200, down from the 162,000 the firm originally reported earlier this month.
The firm recently has entered into a partnership with Moody's Analytics that will change the way the private payroll count is calculated.
The new private payroll count now is actually under Labor's September job creation household survey net total of 114,000, 104,000 of which came from the private sector.
The unemployment rate dropped last month to 7.8 percent. Separately, as the government's establishment survey said the total number of new private-sector workers swelled by 873,000.
Economists expect Friday's report to show 125,000 new jobs and the jobless rate to hold steady.
The soft ADP count could add credence to those who believe the pace of job creation is slower than the government's numbers indicate.
"It's huge, no doubt about it," said Todd Schoenberger, managing principal at the BlackBay Group in New York. "Their changing the methodology tells me that if the number is cut in half with that revision, then the revision we're going to see Friday is going to be a disaster."
Originally posted by beezzer
Record use of foodstamps.
Happy days are here again!
They can fudge the numbers all they want. They can tout certain numbers but can't hide the 49 million foodstamp users.
THAT is Obama's legacy.